I recently read Elizabeth Warren’s autobiography A Fighting Chance which came out in March. Although at times it’s intensely personal, its historical and political aspects are really what make it an engaging read. It presents a compelling history of bankruptcy law in America, an overview of how financial deregulation since the 1980s has fuelled political corruption, and her often ill-fated attempts to fight these trends. It’s not quite Steinbeck, but as an epic on inequality it’s not a million miles away either, and it is definitely worth a read.
Warren describes herself as someone who, like the majority of people without personal experience of bankruptcy, had credulously (in capitulation to cultural commonplace) equated people’s financial shortcomings with moral ones. Depressingly, this prejudice has remained pretty much unchanged since Thackeray’s satirized it in Vanity Fair (1847-8), and has not been helped by the increasingly illusory promises of the American Dream, which has become ever more oneiric and onanistic as its premises have collapsed. A pernicious corollary to the belief that hard work, dedication, and shrewdness lead inexorably to success is the assumption that those who go bankrupt (or merely aren’t particularly wealthy) must be lazy, stupid, doing something wrong, or more often all of the above. In reality, of course, the poorest increasingly work multiple jobs with total hours which dwarf the rich, under conditions that require true heroism and tremendous strength of character to endure.
Warren came to this conclusion gradually, through a thoroughly un-academic approach to her studies. She chose to meet people filing for bankruptcy, rather than remaining blissfully indolent in the ivory tower. She became a Harvard law professor, but never lost focus on the people who were actually facing personal financial crises. This close contact led her to intense empiricism, which remains one of the core strengths of her life and her book. This interest in bankruptcy turned out to be fortunate for her (and for the country) as the rate of bankruptcies in middle-class America soared between the ’80s and the 2000s, during which she became an expert in the field. She traces the origins of the epidemic to financial exploitation of the middle class, which was a consequence of the dismantling of founding-father-age state anti-usury laws. Lobbyists, fueled by the resultant capital from high-interest personal loans, entreated Washington to strip bankruptcy protections from citizens, thereby allowing lenders to squeeze more money from the already deeply distressed, and (if they were lucky) to take out collaterally the meagre fortunes of a few friends and family members in the process.
The removal of these protections was premised on the age-old equation of financial problems with moral problems, the aforementioned flipside of the American dream: If wealth is the earthly reward for pious adherence to the Protestant work ethic1, then poverty can be used as evidence of moral turpitude. Her experience with people actually undergoing bankruptcy sharply contradicted this view, and led her ultimately to join the National Bankruptcy Review Commission in 1995. Though ultimately unsuccessful, this conflict with financial services prepared her for her later fight against the banks as chair of the Troubled Asset Relief Program. Intended to oversee the bailout in 2008, it was neutered, and billions of taxpayer money disappeared unaccounted for into banks. Warren views her later work in founding the Consumer Financial Protection Bureau as her big success story, a regulatory body for loans, intended to prevent predatory lending.
Maybe I’m credulous, but I found her book (and her Audible.com reading of it) quite persuasive. It’s an autobiography with an epic sweep, as she’s lived a highly varied series of lives, but it’s hard not to respect her passion and intolerance for injustice. Some have called her view of Wall Street un-nuanced, and I think she tends to assume that banks are evil, when in reality they mainly act rationally on incentives, rather than having some kind of inherent incitement to harm. But her heart is in the right place. Regulation is hard, especially in the face of corruption and political apathy, so we need all the passion we can get. She hasn’t entered the Democratic primaries for 2016 as some expected, so criticism that this is fuel for a campaign run turned out not to be true. Regardless of her purpose for writing it, it’s a captivating read, and I highly recommend it.
- I.e., the opposite of Balzac’s “Le secret des grandes fortunes sans cause apparente est un crime oublié, parce qu’il a été proprement fait.” [↩]